``Something is wrong with the system,'' according to Prados, ``when the NSC principals advise against a weapons sale, the Vice President says he opposed it, and the President says he does not remember it, but the sale occurs anyway and the proceeds are diverted to another cause entirely.'' This impressively detailed study of the National Security Council, from its 1947 beginnings as a purely advisory board under Truman to its climactic activist role in the Iran-contra affair and beyond, is the first comprehensive look at one of the most powerful yet least understood components of our government. Prados probes deeply into what he contends is a chronic tendency of the NSC to turn itself into a ``little State Department'' (as it did, for instance, when Henry Kissinger was President Nixon's security adviser) and explains how Kissinger's domination of foreign policy made possible the staff excesses of the Reagan years. The book also reveals that the kinds of ad hoc maneuverings attempted by Oliver North and company were not aberrational, but had numerous antecedents in NSC history. Prados ( The Presidents' Secret Wars ) calls for a formal Congressional inquiry into the role of the NSC and the national security adviser. Photos. (Apr.)